Sunday, July 12, 2015

The Many Casualties of Bhutan's Hydro Power Projects

Business Bhutan’s front-page article of July 11, 2015 headlined “MINING FIRM OWNED BY PDP STALWARTS THREATENS TO TAKE GOVERNMENT TO COURT” finally exposes the hydro-power projects in Bhutan for what they really are - a monumental swindle designed to bring this country to its knees, under the burden of debt and bankruptcy. It is sad. But I know that this is not the end of it - there will be many more dead bodies that will litter the wayside - before we hit the hydro-power cul-de-sac.

The mindlessness and absurdity is simply unbelievable, almost sinister! What manner of insanity and witchery holds sway over us that we allow ourselves to be ensnared into these deathtraps called hydro-power projects?

Even while anyone with any iota of commonsense can see that the country has already sunken neck-deep into the quicksand of debt and destruction, the government still talks of saving the hydro-power projects - supposedly “in the interest of the country”. And how does the government go about saving the hydro-power projects and the country? - in a very ingenious way - by shifting the burden of responsibility on the hapless Bhutanese mine operators!

Only last year I remember that the government had, on the floor of the Parliament - no less - eloquently defended the colossal project cost escalation running into tens of billions of Rupees recorded by the Punasangchu Hydro Power Projects I & II, as “geological surprises” - effectively exonerating the Project authorities of any culpability. The government’s act of chivalry towards the Indian project managers and contractors, despite such colossus losses, is certainly admirable.

However, today the government finds that they had failed to read the fine print in the contract and are obligated to remedy their failure. In its attempt to “fulfill the written contractual obligation” to the Punasangchhu Project authorities, the government does something that no self-respecting government should do - it arbitrarily seizes the Bhutanese owned mines, cancels its licence and hands over the mines to the Indian contractors!

Even worst, to rub salt to injury, the government offers the mine operators compensation less than half what is justly due to them.

Obviously the government has been had - it does not matter whether it is the past or the present government. Government of the day has to take on the onus of remedying whatever fault that needs rectification. It is acceptable that the government has to eat humble pie - but it is lame that it should do so by exacting the cost on a mining company that has been issued a legitimate licence to do a legitimate business.

I can understand that the government may stand in need for a private company to bail it out of a sticky situation. And, perhaps, a private company is duty bound to heed the call of duty and put the interest of the country and the government above and beyond, self-interest. But by the same token, the government needs to be responsible enough to own up to its failures and not act the bully by passing on the cost of its failure to a legitimately licenced business activity. It should do its part - by accepting that the mining company is not at fault and thus, cannot be victimized in the process. The mining company deserves to be given their due compensation. That is the honorable thing to do.

Please bear in mind that Bhutan will be subjected to losses running into more than a hundred billion, by the time Punasangchhu Hydro Power Projects I & II are done. Therefore, it does not seem reasonable that the government is reneging on paying out less than 0.20% of the overall losses that it is willing to absorb, caused by the Indian project managers and contractors. It is particularly unfair, given that the same government seized the mines from the private Bhutanese owners - in order that it can hand it over to the Indian contractors - to fulfill its “contractual obligations”.